Correlation Between Thornburg Strategic and Transamerica Intermediate
Can any of the company-specific risk be diversified away by investing in both Thornburg Strategic and Transamerica Intermediate at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Thornburg Strategic and Transamerica Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thornburg Strategic Municipal and Transamerica Intermediate Muni, you can compare the effects of market volatilities on Thornburg Strategic and Transamerica Intermediate and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Thornburg Strategic with a short position of Transamerica Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thornburg Strategic and Transamerica Intermediate.
Diversification Opportunities for Thornburg Strategic and Transamerica Intermediate
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Thornburg and Transamerica is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg Strategic Municipal and Transamerica Intermediate Muni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Intermediate and Thornburg Strategic is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Thornburg Strategic Municipal are associated (or correlated) with Transamerica Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Intermediate has no effect on the direction of Thornburg Strategic i.e., Thornburg Strategic and Transamerica Intermediate go up and down completely randomly.
Pair Corralation between Thornburg Strategic and Transamerica Intermediate
Assuming the 90 days horizon Thornburg Strategic Municipal is expected to generate 0.76 times more return on investment than Transamerica Intermediate. However, Thornburg Strategic Municipal is 1.31 times less risky than Transamerica Intermediate. It trades about 0.04 of its potential returns per unit of risk. Transamerica Intermediate Muni is currently generating about -0.04 per unit of risk. If you would invest 1,406 in Thornburg Strategic Municipal on November 3, 2024 and sell it today you would earn a total of 2.00 from holding Thornburg Strategic Municipal or generate 0.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Thornburg Strategic Municipal vs. Transamerica Intermediate Muni
Performance |
| Timeline |
| Thornburg Strategic |
| Transamerica Intermediate |
Thornburg Strategic and Transamerica Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thornburg Strategic and Transamerica Intermediate
The main advantage of trading using opposite Thornburg Strategic and Transamerica Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thornburg Strategic position performs unexpectedly, Transamerica Intermediate can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Transamerica Intermediate will offset losses from the drop in Transamerica Intermediate's long position.| Thornburg Strategic vs. Thornburg Value Fund | Thornburg Strategic vs. Thornburg Value Fund | Thornburg Strategic vs. Thornburg New York | Thornburg Strategic vs. Thornburg International Value |
| Transamerica Intermediate vs. Gmo High Yield | Transamerica Intermediate vs. Lgm Risk Managed | Transamerica Intermediate vs. Calamos High Income | Transamerica Intermediate vs. One Choice Portfolio |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |